Philadelphia adopts regulations surrounding halted salary history ban
The Philadelphia Commission on Human Relations released regulations interpreting portions of the city’s proposed Wage Equity Ordinance; however, the ordinance is currently on hold amid legal challenges from the city’s Chamber of Commerce.
The full text of adopted regulations is available here.
Per the law firm Littler Mendelson PC, highlights of the adopted regulations include:
- Definition of a Covered Employer and Applicant: The Regulation narrows the Ordinance’s coverage to those positions physically located within Philadelphia. Thus, presumably, employers based in Philadelphia with a multi-state presence do not have to comply with the Ordinance with respect to jobs located outside of Philadelphia, and a Philadelphia resident applying for a job outside of Philadelphia is not protected. Left undefined is exactly how to determine whether a job is located in Philadelphia or not—for instance, in the case of mobile workers.
- Current Employees Applying for New Positions: The Regulation also notes that if an individual seeks a new position with the same employer, in setting the pay for that new position, the employer cannot rely on salary history that the employer may have obtained from the applicant in connection with the (old) initial application for employment.
- Voluntary Salary Disclosures: The Regulation attempts to clarify when an applicant has “knowingly and willingly disclosed” prior salary information without unlawful coercion such that the employer can rely upon that information. It provides the following example: “a Prospective Employee ‘knowingly and willingly’ discloses the employee’s salary history in the context of an employment interview if the Prospective Employee voluntarily, and not in response to a question from the interviewer, makes the disclosure while knowing or having been informed that such disclosure may be used in determining any offered salary.” The Regulation does not, unfortunately, provide specific instructions or safe harbor language as to how an employer may adequately “inform” an applicant that disclosure “may be used in determining any offered salary” without being accused of coercing the disclosure.
- Clarification on Permissible Inquiries: The Regulation states that “An Employer shall not include a question on paper or electronic employment applications asking Prospective Employees to provide their salary history at any previous position.” It does not specifically address whether a “disclaimer” directing applicants for Philadelphia not to answer is sufficient to meet this requirement. (In contrast, the City’s Fair Criminal Record Screening Standards Ordinance specifically states that disclaimers are insufficient to comply with the prohibition on employers seeking applicants’ criminal record histories). However, the Regulation does clarify that other inquiries relevant to salary for the position sought are permitted, such as “the applicant’s salary requirements or expectations, skill level and experience relative to the position for which the applicant is being considered.”
Despite the pending litigation seeking to block Philadelphia’s ordinance, there remains a clear trend of state and local governments enacting prohibitions on salary history inquiries. Thus, employers should remain proactive in keeping up-to-date with this legislative trend to ensure their hiring practices remain compliant.
Source: Littler Mendelson PC, 10/24/2017
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